Episode 91 – The business book in the arena with Raj Nair

Raj Nair hasn’t written a business book (yet). As Executive Vice President and President, North America of the Ford Motor Company, leading one of the world’s leading company’s in one of the world’s most disrupted, fast-moving and complex industries, it’s hard to find the time. But he DOES make time to read them.

Why?

Because good business books make him think: ‘There’s another way to look at that.’ No matter how senior or experienced an executive you may be, when a book brings a new perspective or insight it can transform the way you see your business.

This is a report from within the arena on how business books are used by leaders, and what they’re looking for when they make the decision to invest their most valuable resource – their attention – to read one.

Alison Jones: Hello and welcome to the Extraordinary Business Book Club, and today something a little bit different. I’m here with Raj Nair who is Executive Vice President and President, North America of the Ford Motor Company. Raj’s background is in product development and operations and he’s been responsible for multiple product launches and process improvements since he joined the company in 1987. Welcome to the show, Raj.

Raj Nair: Thanks. Really happy to be here, Alison.

Alison Jones: Really good to have you here. I’m very much looking forward to talking to you. Christian Madsbjerg recommended you because he said it would be good to have someone on the show who was in the arena, rather than sitting and writing about it, in there doing the hard work. So we’ve got a really interesting discussion about that and what books mean to you as somebody who’s been involved in it so much, but before we come onto books, let’s talk about cars. Because the automotive industry is in the middle of a seismic change, isn’t it? You joined Ford what, 30 years ago? It must be almost unrecognisable from the company that you joined. What’s stayed the same? What is it that makes Ford recognisably the same company when everything else has changed almost beyond recognition?

Raj Nair: Well you’re right. There’s been a lot of change, particularly in the last 30 years but even in the last couple of years with the rate of technology and change in the business model, but there’s a lot of things that as you said have stayed the same. We’re still in the business of designing and engineering and manufacturing cars and trucks and utilities and doing that all over the world and personal mobility is still a very big factor in people’s lives and the solution to that, the automobile still plays a large role in society so all of that has been pretty consistent over the last even 50 years or so. But what we see happening in the next 15 to 20 years is going to be a seismic shift, and because our cycles are so long and we have to prepare multibillion dollar programmes and giant factories to do what we do, we have to be planning for that right now even though the business of cars, trucks, and utilities is still fundamentally the same as far as how we engineer and build them.

Alison Jones: You had an interesting phrase there about personal mobility, and it’s personal autonomy as much as anything as well, isn’t it? There’s something about your personal freedom, your effectiveness that… there’s a lot of psychology in the business of cars I think, which is I guess why automotive brands are so powerful.

Raj Nair: Yeah, and I think the two words you used are perfect. What personal mobility means for personal freedom, and there’s almost an aspect of mobility as a right as intrinsic as freedom, particularly in Western society it’s fundamentally changed even how we view our interaction with each other as a society and how much our world has expanded because our own personal mobility has expanded. What we view as a community is no longer just that 25 mile radius from where we were born.

Alison Jones: Yeah, that’s so true, isn’t it? And I guess the challenges that you’re facing, you’ve got to take onboard all the psychological conditions that any big company has to look at. How does this brand make you feel? But you’ve also got a whole stack of governance and environmental issues around it as well, haven’t you, which constrain how you can operate.

Raj Nair: Yeah, I’m sure every business executive that you talk to probably tells you that their business is the most complex business ever, but I’ll give you an argument as to why automotive it’s true.

Alison Jones: You may actually have a good case here. Go on.

Raj Nair: I think our product is unique. First of all, as you said it’s a very regulated product. You could argue one of the most regulated industries in the world between the safety regulations, the emissions regulations and even the regulations around our factories. The product is usually the second most expensive thing that a person buys next to their house, so it’s a very big financial decision for an individual. It’s a product that most of the people you know have experience with so they have their own opinions on it.

Alison Jones: Everybody has an opinion, don’t they?

Raj Nair: Yeah, exactly. The engineering behind the product is technically extremely complex. We build the product on very large scales. These are multibillion dollar programmes and plants. Many of our plants, one of the products rolls off every single minute of every single day, so that’s the definition of mass production. In fact the automotive industry introduced the world into moving assembly lines and high volume mass production.

Alison Jones: Not just the automotive industry, it was Henry Ford himself, wasn’t it?

Raj Nair: Exactly, and at one point in time commercialism was referred to as “Fordism” even.

Alison Jones: I didn’t know that.

Raj Nair: And there’s so much information available about the product now. The consumers do incredible research and here’s the kicker. You mentioned it. With all of that available, a really expensive product mass produced, technically complex, an amazing amount of information available about it for you to make a very logical decision, often it’s an emotional decision about what you buy and what that product means and what it means and what it says about you. All the way from the colour of the product to the engine you choose, and do you choose a sports car or a luxury sedan? It says as much about you as the clothes you wear. So that combination of emotion, the technology, the regulations, the scope of investments, the timeframes that we build on, all of that. It’s pretty hard to find any other product that has that combination.

Alison Jones: Yeah, I’m never going to complain about publishing again, actually. You’ve convinced me. I like the point about the emotion. As an engineer, that must suck. “But look. Look at the engineering beauty of this thing.” “Yeah, but just this brand makes me feel good.” That must be awful.

Raj Nair: Actually, it’s the opposite because most of the engineers that you find that are in the industry have the same love of cars that they can’t explain themselves, so when you’re designing a product that you love, you get to do all of your engineering tools but you get to use the emotion and the passion that you have for the product and your customers have that same passion. Actually it’s great. We love working on cars and trucks that our customers love, and so the emotional side actually plays to us as automotive engineers.

Alison Jones: That makes me feel a lot happier about the industry actually. I like that. Now, you’re in the arena as I said. You’re dealing with these multifaceted challenges on a daily basis. I guess you probably don’t have time to read business books, do you? (Leading question…)

Raj Nair: It’s fair that certainly during the week and even a lot of weekends I’m doing so much reading for work, but I do try to carve out some time on a long weekend and certainly on vacations for reading just for myself, and certainly there’s some good business books that are on my library shelf from having read during a nice vacation on the beach.

Alison Jones: So you don’t go for escapism or chick flicks or anything …

Raj Nair: No, no. I have to admit when I was younger I really loved science fiction and I can’t tell you how many times I read Lord of the Rings, but something happened to me and now I read more business books and I actually find them enjoyable, which is crazy if you think about it.

Alison Jones: Well, not on this show. On this show you can indulge your passion for business books as much as you like, but tell me: What do you look for? When do think, “Huh, that looks interesting?” What is it that piques your interest in a business book? What are you hoping to get from it?

Raj Nair: I think two things. One, just an aspect that I hadn’t thought about before. There’s so many books on the surface that reinforce … I don’t want to call it common sense, but go deep into what’s fundamentally common sense, so I do look for books that actually challenge your original paradigm and your perceptions and make you think. I’m also wary of any book that tells you that they’ve got all the answers. So the books that leave the questions open ended I really enjoy, for you to fill in the blanks.

Alison Jones: That’s very interesting, because as publishers our favourite word is “definitive.” “The definitive guide to this or that”, and of course it never is because nothing ever is. So you’re saying actually you like it when somebody says, “Huh, there’s more questions over here. This is interesting,” and leaves it like that.

Raj Nair: Yeah, absolutely. I think the idea of anything being definitive is almost fundamentally wrong. It can’t be because as soon as you think it is the world’s changed already, and I also think there’s always a balance in aspects so any book that over-indexes on a particular aspect of the business. So much of business is balancing all the competing tensions, whether that’s balancing the cultural differences or balancing the financial differences or balancing the short term versus the long term. I’ve always had a business philosophy of, it’s very much a yin-yang business, and finding that balance and the sweet spot is the key.

Alison Jones: Yes, and there is a temptation I think for authors to make a clean, startling message that almost by definition cuts out so much of the picture, so trying to balance saying something new and interesting with capturing the nuance of the complexity of how life really is is actually quite a tough gig, isn’t it?

Raj Nair: Yeah, and I think it’s a reflection of someone who’s actually been there and realises how tough it is, and you can kind of tell the authors that have done that versus those that are perhaps playing more in theory versus practice.

Alison Jones: Now Christian was very keen that you should write a book for this exact reason. Has he mentioned this to you?

Raj Nair: Yes he has. Yeah.

Alison Jones: Is this part of his campaign in fact?

Raj Nair: I mean, I would need a lot of help. Maybe Christian will help me with it, because I don’t know if I’m as good at getting my thoughts down coherently as he is.

Alison Jones: Well I think it’s the least he could do, frankly, but I think it’s such an interesting point because business people, people who have something really interesting to say who got that experience and who worked through all the complexity of it, by definition they’re not professional writers so this is a conundrum. There are very few people who can do both.

Raj Nair: Yeah, and I think it’s certainly the skill that’s required for you to communicate in the written word, and also I think business people who’ve been through that probably have a bit of attention deficit disorder as well, so for our ability to sit down and concentrate on writing a book for that period of time, I don’t think it comes very naturally to us.

Alison Jones: But just imagine, you wouldn’t have to go in a meeting for months. Wouldn’t that be fantastic?

Raj Nair: Certain meetings for sure, but there’s also a certain interaction in certain meetings when you really see a team gel, when you see everybody really pulling on the rope at the same time and really intellectual curiosity in the room. You can feel it and everyone really providing value in their area of expertise. There’s a certain magic in – even though it’s a business meeting – there’s sometimes a certain magic that comes out of that and sometimes magical products come out of those meetings.

Alison Jones: Oh, that sounds poetic. I love that. I’ve never heard a meeting described so beautifully.

Raj Nair: They’re rare. Those type of meetings are-

Alison Jones: I was going to say wow, you go to different kind of meetings than I’ve ever been to.

Raj Nair: Yeah, when you’re in one though it’s special.

Alison Jones: If you imagine yourself I don’t know 10, 20, or however many years from now and you’d written a book, why would you have done it do you think? What is in it for somebody like you who’s been very successful in their career? Why write a book? What would motivate you to do that?

Raj Nair: I think it would be teaching. I think when you get to a certain leadership level in a large organisation, a lot of what you’re doing is actually teaching by example. It’s not that you actually need to make some of those very specific decisions, but you’re showing your team what kind of logic you’re using and how you’re looking at the prioritisation and the questions that you’re asking, and so causing them to think also and so that aspect of what you’re doing in managing an organisation that’s teaching by example. I think it’s always an aspect of how could I hit a broader audience, and certainly writing a book about both experiences and how you looked at managing the business, and teaching a larger audience is certainly attractive as a business manager. Because it is an aspect of what you do in a large organisation.

Alison Jones: I like that. It’s almost seeing the book as coaching at scale, isn’t it?

Raj Nair: It is. Coaching and more efficiently, but at the same time – you mentioned it – business managers like myself are probably more skilled at doing that in the physical presence of our teams rather than through the written word, and so we would really have to think about how to be as effective at that, which is why a partner like Christian … I don’t know if I’m talking myself into writing a book with Christian right now or not, but hopefully he isn’t listening. He’s going to give me an immediate call I think.

Alison Jones: I think you might be walking into his trap if I’m honest with you. Going back to when you’re reading a book and thinking about how you might put things across, have you noticed any particular techniques or structures or tools that authors use that allow you to get what they’re saying more quickly? I think this will be really invaluable for people who are writing and there are people who are writing for people like you. They’re writing for busy leaders, people who want to apply stuff and get it quickly. You can sit down and write your stream of consciousness in a novel-type book, but it’s not really going to stick, is it? How do the writers that you most admire hone their ideas for someone who’s busy and wants to just get the nub of it quickly?

Raj Nair: I think the tool that some writers have, to use an example that seems intuitively obvious, and then apply that example to your business in a way that you had not thought about it before that makes it almost intuitively obvious, why didn’t I look at the business that way? A couple authors come to mind. One is Christian and his book, Moment of Clarity, where he was really going through some simple examples of how market research is typically done, but what were you trying to learn and how it would be different if you were actually watching people’s behaviours versus asking them the question and asking them to fill out the form.

And in our own business we obviously do a lot of market research and we’ve done so much for so long we kind of take the methodologies for granted, so our aspect of gathering a focus group and having a facilitator and having them look at the new vehicle and then having the clipboards and filling out scores and comments is so ingrained in our business, and reading about some of the behavioural studies that Christian’s team had done on other products and thinking about how that applied to ours really opened my eyes as to why we were into some of the issues that we have in our product right now.

We’re probably in a state of our industry where our products have perhaps gotten too complex for our customers. Not even perhaps. They are too complex for our customers to fully take advantage of, and it’s because we’ve incremented these features as engineers and to what makes total sense to us, instead of taking a step back and watching how humans actually interface and behave with our product and what their unspoken pain points and needs are. So that aspect of providing an example perhaps in someone else’s business or just in the everyday world and then showing how that relates to business I find is a common theme in some of the books that I really enjoy.

Alison Jones: That’s very interesting and you’ve articulated beautifully I think what is one of the most powerful reasons for somebody who’s too busy to read to read a business book, which is that it brings in new perspectives. Because you spend so long in your specialism, in your industry, in your sector. You’re master of, as you say, everything about your own business and your own customers, but actually when you bring in creativity, it normally comes from a new insight with different blind spots. Was it Christian that used that phrase?

Raj Nair: Yes. Exactly.

Alison Jones: Which is I think one of the most powerful reasons to read.

Raj Nair: And sometimes it’s not even a blind spot. It’s something you actually have thought about, and I actually enjoy that feeling when there’s something that I’ve thought about it but have taken for granted in a certain perspective, and then reading something that causes me to relook at that and say, “Oh no, there’s another way to look at that.”

Alison Jones: Yeah. That’s fascinating, and I think it also gives great hope to people who are listening to this who are saying, “Well, how on earth could you write anything that Raj Nair would want to read?” Because Raj Nair doesn’t know your world, and your world can throw new light on his, which is one of the great joys I think for anybody who loves books is that sort of connection of minds across time and space and industries, to bring it more prosaically back down. And each time you make a connection a little new neuron lights up, doesn’t it?

Raj Nair: Yeah, and you have to be willing to let it light up. You have to recognise there’s always so much more to learn, and if you actually enjoy a paradigm that you’ve taken for granted to be questioned then there’s a lot to provide value in changing your business.

Alison Jones: Yeah, stay curious. Do you have any books that you would – apart from Christian’s, obviously – do you have any business books that have particularly impressed you or helped you down the years?

Raj Nair: Yeah, there’s a couple that have struck me over the years that have really impacted me. One I read quite some time ago is The Black Swan by Nicholas-

Alison Jones: Ah yes. Yes, I remember. I never read it actually but I remember being really taken by the metaphor.

Raj Nair: Yeah, and it’s a fantastic metaphor right in the title that if you’ve never seen a black swan you could certainly talk yourself into thinking that they don’t exist, and then you could build your business around the fact that only white swans exist and when that black swan does come around it could totally destroy your business because you’ve just assumed it doesn’t exist because you’ve never seen one, and so how would you look at the world differently if there is an assumption that the world has taken that there’s no black swans but if you actually go through the logic, it’s very possible there is a black swan. In fact it’s very likely that a black swan will eventually be seen, and so I just found that whole metaphor and the concept and the depth that the book went into on many, many examples of that really entertaining to read, but also insightful for aspects of our business of whether it’s preparation for economic downturns or regulatory changes or changes in customer taste. Are you sure those won’t happen? In fact, are they very likely to happen? And then how would you be prepared for that?

Alison Jones: Yeah, it reminds me of the disaster planning Shell did decades ago. “Imagine oil would go to a dollar a barrel.” “Oh, it could never happen.”

Raj Nair: Well, it’s not just disaster planning. Some of these black swans don’t have to be earthquakes or disasters or extremely rare occurrences. It’s just a change in a trend that inevitably is going to happen, and we just assume we always mean average to the long term trend. That’s just not the way the world works, so you almost need to be planning for what happens if it does go outside the normal limits of whatever it is. Exchange rates or like I said, customer preference, size of vehicles, fuel economy regulations, anything. So the scenario planning really comes much more heavily into play if you recognise black swan events are part of real life.

Alison Jones: And from a publisher’s perspective, The Black Swan is a perfect title because it’s intriguing. It’s resonant. It’s almost poetic. But it embodies in three very simple, very visually stimulating words, a really powerful paradigm shifting way of thinking.

Raj Nair: Yeah. It may have been I have to admit, I think I saw it in an airport and I just saw the title and I thought oh, that’s interesting.

Alison Jones: Exactly.

Raj Nair: So don’t underestimate the strength of a good title.

Alison Jones: And the power of metaphor as well, because it manages to distil everything down to the point where everything that you’ve just said about that book is encapsulated in that title, and it’s a shorthand so when you’re in a meeting you can say, “Huh, it’s a black swan moment,” and everybody knows what you’re talking about. Very clever.

Raj Nair: Thank you.

Alison Jones: Any other recommendations?

Raj Nair: Yeah, I think two others. Another book by Geoffrey West, Scale, which again makes connections that you wouldn’t think of. He I think starts off the book talking about the biological aspects of scale, and even the physical size of animals and if you look at a mouse and a human and an elephant, it turns out that each of us has very different average lifetimes.

A mouse is very short and humans we would call average and elephants a longer lifetime, but the number of beats that our heart actually makes is identical. And then he extrapolates that into the efficiency of larger organisations as to how the same number of equivalent heartbeats is used so much more efficiently, and then extrapolates that out into the biological aspects of cell organisation and clusters and organs, and then makes a leap into businesses and societies and cities of how scale eventually improves efficiency, and then long term trends of why companies tend to keep getting bigger and bigger and why cities get bigger and bigger and why urbanisation is theoretically an improvement in the efficiencies and the influence it has on culture and conversion of energy and many other aspects.

So I just found that fascinating of again, thinking about something that intuitively makes sense to me, biological science, but then translating that to businesses and organisations and the analogy was striking to me. Particularly running a large organisation. I could equate how Ford evolved in that way to make itself the size it is right now.

Alison Jones: Yeah, and I guess maintaining efficiency, maintaining that efficient heartbeat at scale is the trick, isn’t it? Because then you get the benefits of scale without all the bureaucratic drawbacks of it.

Raj Nair: That’s exactly right. When the drawbacks start outweighing the benefits, that’s when certainly Darwinism results into the death of dinosaurs, et cetera, right? And so translating that again into sizable organisations and to cities as they go through a cycle of urbanisation and suburbanization onto ruralization but then back into urbanisation. Going through those cycles as we see right now happening in the world I thought was fascinating.

Alison Jones: That is fascinating, and I guess mapping innovation against that as well is a whole new chapter too.

Raj Nair: Yeah, it’s interesting. The aspect of innovation and how it can serve as a catalyst for a rapid increase in the movement toward scale, and certainly the computer science advancements that we’re seeing right now and artificial intelligence advancements I think is possibly one of those catalysts that’s happening right now that will fundamentally change the scale of how we operate.

Alison Jones: Can you hold that thought? Because I want to come back to the future, particularly of cars, but just before we do you had a third recommendation?

Raj Nair: Yeah, it’s not really a business book but I recently met Doris Kearns Goodwin at a dinner and I felt very bad that I had never read any of her books, and so after I-

Alison Jones: Awkward.

Raj Nair: Yes, exactly, but obviously I had heard of her and she was a very highly respected author, so I read Lincoln: Team of Rivals after meeting her and I just thought that was a very fascinating book of his political genius and managing a cabinet that he created by basically all of his political rivals and everyone who had run against him to become president of the United States, and it’s almost by definition the most politically powerful people that were in the nation at the time, but complete rivals and the political genius he had in moulding them into an extremely effective team that obviously served the country extremely well in very fraught and harrowing times for the republic.

So I thought it was a fascinating book of almost a management guide, because often I think everyone is on the same team but certainly there’s individual aspirations that we all have for our positions, and so there’s natural human rivalries that happen in any organisation. Probably not as clear cut as for Lincoln and election opponents, but moulding that into a team that all has the same vision and recognises each other’s strengths and weaknesses and balancing all those weaknesses and reinforcing each other I thought was a fantastic management guide.

Alison Jones: That’s terrific and I love the way that your recommendations have embraced not just traditional management theory and leadership and so on, but the natural world and science at a variety of scales and politics and always bringing it back to just shedding more light on who we are and how we are and how we work, because at the end of the day we’re just humans in organisations. Really interesting.

Raj Nair: Yeah. Every business, no matter what it does and what it produces and how it serves society, is still a business made up of people, and so we’re all in a people business.

Alison Jones: Absolutely, but I can’t possibly let you go without asking this, because of personal curiosity as much as anything. What do you think is the single most exciting opportunity on the horizon for your industry?

Raj Nair: Wow, that’s a great question. There’s multiple aspects that’s happening to our industry relative to our environmental impact and reducing our environmental impact on the world. Obviously a lot of globalisation going on as well as changes in some aspects of nationalisation and trade barriers going up. The strength of China coming into the industry as well as Asia Pacific in general. The urbanisation we just talked about which is changing people’s personal mobility models.

But for me, and perhaps it’s the engineer in me as well, and it’s a bit more of a long term view but when I look at what the theoretical impact an autonomous vehicle would have on personal mobility, I’m really excited by the possibilities. First just the technical challenge of it is just very fascinating to me as an engineer, but the business possibilities of how personal mobility fundamentally changes if you’re in an autonomous vehicle, and I can tell you I’m in the industry because I love cars, as I mentioned. I love to drive, and I used to race when I was younger and so the act of driving is very enjoyable to me. Having said that, I hate my commute. My commute is 35 minutes. It’s in marginal rush hour. It’s just straight. I’m just following the car ahead of me, and I would have no qualms in an autonomous vehicle driving me back and forth to work.

Alison Jones: I have to say as a publisher, I think this is where our wills collide, because I think when we have driverless cars or autonomous vehicles, however you call them, people are going to read more books. That’s my hope. That’s my hope for the world. This is how we’re going to restore civilization.

Raj Nair: Exactly, but that time available to be more productive in whatever you choose to pursue is certainly one of the benefits, and the improvement in safety and the ability for people who didn’t have personal mobility before, whether they’re young or old or disabled, and the ability to go from your point A to point B versus mass transit’s point A to point B. It really changes the entire transportation operating system if you take it out to its nth level.

Alison Jones: Yeah, it is. I had a suspicion you might say that. I think it’s fascinating. I’m really watching this unfold with real interest. Brilliant. Now, I always ask … Of course this is why you’re here, because Christian recommended you. I always ask my guests to recommend another guest onto the show. Someone with something interesting to say about the business of business books. Who do you think would make a good guest for the Extraordinary Business Book Club?

Raj Nair: Well, I can’t say I’ve met Nicholas Taleb but I enjoyed his book so much. I think it would be fascinating to hear his thoughts. The other would be, and I have had the opportunity to meet her and have dinner with her and she was just fascinating to talk to, is Doris Kearns Goodwin. She’s written about multiple presidents and has actually worked with Lyndon Johnson and so I think has tremendous insight into political leaders and the type of people they are and the challenges they face, and I think that relates so closely to what we do in managing businesses. I think she’d be a fantastic guest.

Alison Jones: Two great recommendations. Thank you so much. Now, if people want to find out more about you Raj, more about what Ford is doing, more about autonomous vehicles, where should they go?

Raj Nair: Well, as any big business does we have our website so it’s pretty simple, www.Ford.com, and tells you a lot about our businesses and vehicles and if you look hard enough you’ll find somewhere a little bit about me as well.

Alison Jones: Fantastic. You are such a busy man and I really appreciate you taking time out to talk to us today. That’s fantastic. Thank you.